Understanding the Zhejiang Industrial Clusters:Questions and Re-Evaluations Lu Shi, Bernard Ganne
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Understanding the Zhejiang industrial clusters:Questions and re-evaluations Lu Shi, Bernard Ganne To cite this version: Lu Shi, Bernard Ganne. Understanding the Zhejiang industrial clusters:Questions and re-evaluations. Asian Industrial Clusters, Global Competitiveness and New Policy Initiatives, World Scientific, pp.239- 266, 2009. halshs-00357131 HAL Id: halshs-00357131 https://halshs.archives-ouvertes.fr/halshs-00357131 Submitted on 29 Jan 2009 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. International Workshop Asian industrial Clusters Lyon, 29 th -30 th November, 1 st December Understanding the Zhejiang industrial clusters: Questions and re-evaluations 1 by Lu SHI, Associate Professor, University of Lyon 3 and Bernard GANNE, Research Supervisor, CNRS General introduction Under the current climate of rapid industrial development in China, the phenomenon of industrial districts or clusters, or concentrations of businesses involved in the same type of industry, are of significant importance in certain regions. Although it may have existed in a more clandestine manner before the reform of the early 1980’s, this phenomenon is a relatively recent one, first emerging around a decade ago, and seeing significant growth and taking on a more concrete structure since the turn of the century. Studies have therefore only been carried out on this phenomenon in China relatively recently. It could be argued – debatably – that this phenomenon was first acknowledged a long time ago, perhaps even before 1949, when Professor Fei Xiaotong carried out his cross- sectional study “ 块状经济” (similarly to Alfred Marshal’s contribution to industrial districts in France). However, it is only since the turn of the 21 st century that Chinese researchers have begun to pay close attention to the subject. They include geographers, notably the analytical work of Professor Wang Jici, geographer at the University of Beijing (WANG Jici, 2001), the economists and sociologists of Sun Yat-sen University, Guangzhou (WANG Jun, 2004), and 1 Our sincere thanks go to our Chinese colleagues, Professors Wang Jici, Jin Xiangrong, Yu Yingchuan and Sheng Shihao, for their valuable assistance during our field work in Zhejiang in July 2006. the economists and management specialists at the University of Zhejiang (ZHANG Shuguang and JIN Xiangrong, 2006) to name but a few. A series of publications on this theme can also be found in other regions of China. On the whole, it can be argued that the general observations about the phenomenon in China have already been made, such as the geographical location of the clusters and the different types of clusters in place. Even though the various proposals for cluster typologies do not concur precisely, the current Chinese approaches to the phenomenon of clusters suggest 4 principal types of industrial clusters 2. 1. Clusters of traditional, highly integrated firms, which can be found in several regions of China, more often in small towns and rural zones undergoing urbanisation. These clusters are highly specialised solely in the manufacture of consumer goods, such as those found in Fujian or Zhejiang. Industry has become the main economic activity in these rural areas, favouring companies owned by the State which, prior to the reform, was unable to satisfy market demand. The success of these private, rural companies has attracted many others into the market and created a concentration of businesses. 2. High-tech clusters, more often situated in large cities near university centres. These focus mainly on electronics, such as the Zhongguancun area of Beijing or the fibre optics cluster in Wuhan, etc… 3. Clusters of foreign companies, mainly the result of FDI from Taiwan, Hong Kong and Singapore, etc. They bring together a number of other firms with whom they have working relationships, as seen particularly in Guangdong. Sometimes, investors may bring their own parts suppliers with them, moving an entire network into the country. This is especially common among Taiwanese entrepreneurs. 4. SME clusters grouped around large companies, as seen in both the shipbuilding industry in Shanghai and, more recently, the automobile industry in Wuhan, etc. The problem faced is therefore vast, and there is an immense field for study. 2 Here, we have adopted the typology proposed by Professor Wang Jici in his work " Chuangxin de kongjian (Innovative spaces : entreprises clusters and regional development)", 2001. In this study, we have chosen to focus on the first type of business conglomerates, mainly comprising SMEs engaging in the same type of activity – similar to those observed in Europe (and Italy in particular) some thirty years ago. There are numerous zones of highly specialised development in China. However, among these, Zhejiang province is undoubtedly considered the most remarkable, and is seen as a role model in modern evolution towards a market economy. How have the Zhejiang clusters developed? What are the characteristics of this development? Is it possible to talk about a “third China” along the same lines as the former “3 rd Italy” with regard to industrial districts? Do Chinese clusters in fact have any specific characteristics? These are some of the questions that we will look to address today. I. The Zhejiang clusters: a traditional cluster model? I.1. A small, rather neglected province which has seen strong autonomous development over the last 20 years Zhejiang is, in fact, one of the smallest provinces in China (occupying 1.06% of China’s land surface). In 2005, it had 48,980,000 inhabitants (according to the hukou register), representing 3.75% of the population of China. With hills and mountains accounting for more than 70.4% of the province, and with few natural resources, Zhejiang has been somewhat neglected by the government. Between 1953 and 1978, the region’s inhabitants received an average of just 114 Yuan of state aid per person – just over half 3 of the national average. In economic terms, Zhejiang has also received the lowest level of state support. Even in the period between 1982 and 1989, which saw economic reform in both urban and rural areas, state investment in Zhejiang represented just 2.5% of the total investment across the country 4. However, over the last 20 years, the province has risen from 12 th to 4 th place in China in terms of gross national product. In 2003, Zhejiang had the third highest average revenue per inhabitant in China 5. This development is mainly linked to the rapid industrial expansion that this traditionally agricultural region has experienced – an industry based mainly on the province’s large number of small, family companies. Zhejiang was the first province in China to see the 3 52.5% of the national average to be more precise 4 SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang , p.2. 5 SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang , p.1. development of industrial family workshops in the mid-1980’s. Today, the province has the highest proportion of private companies in China: 92%, compared to a national average of 60%. In 2001, the number of SMEs with sales turnovers of less than 5 million RMB was estimated at 682,000. These businesses employ 5,976,400 people, representing 65% of the industrial labour force 6. One third of these private companies, which mainly manufacture of consumer goods (socks, cigarette lighters, leather, shoes, toys, hardware products, etc…), are involved in the textiles sector (37.2%). A further 8.6% are involved in the clothing industry, and 6.3% in the manufacture of metal goods 7. These SMEs are grouped geographically and specialise in a particular manufacturing sector: one product per village and one sector per region ( 一镇一品, 一乡一业,). This so-called “compartmentalised economy” ( 块状经济) can be found in 85 of the 88 towns in the Zhejiang district 8. In 2001, it was estimated that there were 519 specialised industrial clusters with a production value higher than 100 million RMB 9. We will now provide a brief description of these clusters. I.2. The Zhejiang clusters: a short presentation Map of the Zhejiang industrial clusters A number of researchers have proposed 3 distinct zones in the Zhejiang clusters following the endogenous model and spontaneous development 10 . PowerPoint presentation – Zhejiang map and table Administr Industrial sectors Cluster types ative areas Hangzhou Machines and equipment, electronic Huangzhou : automobiles; communications, household appliances, medical, high-tech Yan qian in the town of Xiao shan : chemical fibre; Nan yang : umbrellas; 6 SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang , p.9. 7 SHENG Shihao, Zhejiang xianxiang, p.10-11. 8 SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang , p.41 9 SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang , p.41 10 see SHENG Shihao, ZHENG Yanwei, Zhejiang xianxiang Xin tang : bird feather products; Xiaoshan : textiles, automobile parts Ningbo Clothing, mechanics, petrochemical Yuyao : industrial moulds, toys, plastics; industry, etc. Hengjie : watches; Jiangshan : gas appliances; Xianxiang : safes Shaoxing Textiles,